Could California shell out $6.7 billion for this new hepatitis C drug?

If California were to provide Sovaldi and its accompanying therapy, ribavirin, to all 93,000 of the state’s Medicaid enrollees and prisoners with the disease, the cost to the state would be $6.7 billion, more than any other state. And if all the states provided the medications to their stricken patients, the cost to the nation’s taxpayers would total $55 billion.

Those figures are from an analysis released Thursday by the Express-Scripts Holding Company, the nation’s largest pharmacy benefits manager and one of the loudest critics of the Foster City company’s price for Sovaldi.

“There is no doubt that Sovaldi is a breakthrough therapy, but unfortunately, it is also likely to break state budgets,” wrote Dr. Steve Miller, Express-Scripts’ chief medical officer, in the analysis. “Since healthcare for so many hepatitis C patients is funded by state programs, each citizen will be shouldering the unprecedented cost burden. The unsustainable pricing of this medication has essentially become a tax on all Americans.”

The pricing of Sovaldi and ribavirin incorporates the 23 percent discount that all drug manufacturers must provide state Medicaid programs.

In California, the cost of covering Sovaldi and ribavirin for all Medicaid enrollees and prisoners would work out to $174 per resident, according to the analysis. The state with the highest cost-per-resident, however, is Louisiana, at $294.

Texas, Florida, New York and Illinois would also be among the top five total spenders when it comes to covering the medications for prisoners and Medicaid enrollees, according to Express-Scripts.

A previous report by Express-Scripts predicts that the U.S. will spend 1,800 percent more on hepatitis C medications in 2016 than it did in 2013.

In return, Gilead argues that Sovaldi’s cost is justified by its high quality: The drug can cure more than 90 percent of patients with the most common type of hepatitis C. And the company argues that taking a daily $1,000 pill for 12 weeks is much cheaper than traditional hepatitis C treatments, which last about a year and cure roughly half of patients, or costly complications such as a liver transplant.

Sovaldi, which won federal approval in December, is also a blockbuster for Gilead. It generated $2.3 billion in sales in the first quarter of 2014, a record for a new drug. Gilead is once again expected to report strong sales in the second quarter during its earnings call next Wednesday.

As of mid-day Thursday, Gilead’s stock was down slightly, 1.28 percent, to $85.86.

A Gilead spokeswoman to declined to comment on the report.

Updated, 1:30 p.m.: Post has been edited to include information about projected rise in spending on hepatitis C medication, and the fact that Express-Scripts’ analysis incorporated a mandated 23 percent discount for Medicaid. Also updated to include Gilead’s response.